Rachel Reeves exposed for making ‘dubious claims’ to justify bombshell tax rises

Shadow Chancellor Jeremy Hunt has defended the Conservatives’ record on the economy against “dubious claims” made by Rachel Reeves.

Speaking in the House of Commons, Mr Hunt said: “When it comes to dubious claims, there are some rather dubious ones the new Chancellor has herself been making that do not withstand scrutiny.

"She says, for example, that the economy would have been £140billion bigger if we’d matched the average OECD [Organisation for Economic Co-operation and Development] growth rate.

“But as she knows, the OECD is a very diverse group of 38 countries, including many with economies very different to our own, such as Turkey, or Mexico or Luxembourg."

He said a "much more meaningful comparison is with other similar G7 economies", adding that: "Since 2010, we’ve grown faster than France, faster than Italy, faster than Germany and faster than Japan.

“Indeed, the IMF [International Monetary Fund] say that thanks to difficult measures taken by the last Conservative government, we will grow faster than any of those four countries - not just in the short term, but over the next six years."

He added: "One of the reasons for that is our record on attracting investment.”

The Chancellor has signalled she will hand public workers a pay rise, but experts have warned it will cost the exchequer £10billion - leading to punishing tax hikes.

There are also fears that ramping up wages by so much will cause inflation to spike again.

The knock-on effect of this will lead to a delay in cutting interest rates, which will then hit millions of mortgage-holders.

Mr Hunt said the pressures on public finances were “never a secret” and Ms Reeves is claiming things were worse than Labour expected to justify tax rises.

He told MPs: “The most dubious claim that we have heard of all is this nonsense about the worst economic inheritance since the Second World War, which everybody knows is just a pretext for long-planned tax rises.

“You can see what nonsense this is from a simple comparison to the last time we had a change of party running the government in 2010.

"Inflation then was 3.4 percent, compared to 2 percent today. Unemployment was at 8 percent compared to 4.4 percent today, growth was forecast at the time to be one of the slowest in the G7 compared to the fastest today.

"Instead of an economy where markets and the pounds were facing meltdown, she has had inherited one which the ONS [Office for National Statistics] said growth was going gangbusters.”

He added: “In her BBC interview yesterday, the Chancellor … glossed over those figures putting on the most shocked expression she could muster to pretend the public finances are worse than she expected.

"But the root cause of the pressure on public finances – £400billion of pandemic support, £94billion of cost-of-living support – was never a secret.”

Mr Hunt further stated: “As she establishes her reputation, it is surely unwise to base your big central argument on a claim so patently ridiculous. But we all know exactly why she’s doing it. She wants to lay the ground for tax rises that she has been planning all along.”

In response, Ms Reeves claimed the Conservatives had presided over the “first parliament on record where living standards were lower at the end of the parliament than they were at the start”.

She also criticised the high debt and tax burden, mortgages going “through the roof”, and a technical recession in 2023.

She hit back at Mr Hunt’s claims, telling him: “If that is such a good inheritance, I would hate to see what a bad one looks like.”

She told the Commons: “I heard what the Shadow Chancellor said from the despatch box now and on the television yesterday, to claim that I should be grateful for what he has left us. Unbelievable, because the right honourable gentleman knows the truth and he’s now trying to rewrite history.

“In doing so, he has reminded the British people why the Conservatives lost the election – they’re out of touch, deluded and unable to defend the indefensible.

“And in the weeks ahead it will become clear what his party did. They stored up problems, they failed to take the tough decisions and then they ran away, leaving it to us, the Labour Government, to pick up the pieces and clear up their mess.”

The Chancellor also said: “We have had more growth plans (since 2010) than we have had prime ministers or chancellors – and that’s quite a lot – but growth requires more than talk, it requires action.

"Like so much else with the previous administration, when you scratch beneath the surface, the facade crumbles and all that is left is the evidence of 14 years of failure.”